‘International credit rating agency Moody’s has downgraded the outlook
for three Singapore banks – DBS, OCBC and UOB – to “negative” from
“stable” for the next 12-18 months.’ Quoted from TRE.
Big, strong and friendly banks with triple A ratings are now rated as
negative? What does it mean? How is this equated to the A, B and C
rating scale? Are our banks now in the B grade or C grade? Getting a
negative rating is no joke for sure.
Taking a peep into Moody’s full report on Stand alone Credit Strength,
DBS is now rated as B/aa3 and Neg, OCBC is B/aa3, Stable, and UOB has
the same rating as OCBC. Bank of Singapore, BOS is rated C-/baa1 and
Stable as well. The overall average rating of Singapore banks is B/aa3.
The Long Term Bank Deposit ratings for all the local banks are
Aa1/Stable except for DBS with a Negative rating.
One of the main reasons given by Moody for this downgrading is the banks
exposure to housing loans which stands at 77% of household debt. Moody
also mentioned that ‘77% of Singapore banks’ non-performing loans (NPLs)
were related to loans made by borrowers outside Singapore in 2012,
compared to 65% in 2008.
With the uncertainties in the world economy and the risk of higher
interest rates, the impact of a tightening of monetary policy in the US
could trigger big movements in the flow of funds in and out of emerging
countries and the local market. A big outflow could have adverse effect
liquidity and interest rates and the housing market.
How serious would this be is still a grey area. The consequences of the
US subprime crisis is still vivid to many and something that no one
wants to see here and no one would believe such a scenario will happen.
There is American exceptionalism and there is also Singapore
exceptionalism. We are exceptional and we will not be in the same plight
as the Americans and no subprime crisis will be allowed to happen here.
Our situation is well under controlled by the most expensive talents
available managing it. No worry, the Moody downgrade is just a paper
downgrade and nothing untowards will happen and there is no need for
fear mongering.
There will be no housing crisis here and those who think that people
will be jumping from the flats are just talking nonsense. Our property
prices will continue to go up as usual.
26 comments:
The banks' ratings have not been downgraded. The OUTLOOK of the banks and banking industry has been downgraded. Which means currently the banking environment is sweet and cozy, with low interest rates - which is great. Because interest rates are so low, the only way in can go in the future is up - so the outlook can only be negative vis-a-vis the current situation. Just like you are number 1 in class. If the can maintain that, then you will be stable. But if you cannot, the only way you can go is down.
I don't care about bank downgrades.
I only worry I may not have enough $$$, especially fixed deposits, in the bank.
Fixed deposits (FD) are very safe and won't lose one, and should be at least 43% of your total assets.
I believe the PAP "fixed deposit" votes are also around 43%. But unlike bank FD, PAP will only know this during a by election.
FEAR NOT FEAR NOT!
Singapore is goooooooooooooooooood.
Look at the latest property launch, oversubscribed!
Look at the current COE/car prices, people still buy!
Tio Bo......
Singaporeans Are The Fastest In The World To Become Millionaires - Forbes
http://www.forbes.com/sites/neerjajetley/2013/07/08/singaporeans-are-the-fastest-in-the-world-to-become-millionaires/
GE 2016.
More PAPigs will get chance to become Millionaire Ministers.
Redbean,
Ironically, the market's own "credit rating" and "outlook rating" of the 3 "heavy weight" US rating agencies namely Standard & Poor, Moody's and Fitch had long been downgraded since 2008 Lehman Brothers' belly up.
When triple AAA stuff can become almost worthless almost overnight, ratings have somewhat become dubious to some extent nowadays. No?
Having said that, our interest rates are practically in lock steps with uncle Sam's but not necessarily having the same type or set of economic problems or malaise as them. Inevitably, imbalances in the overall domestic aggregate demand and some "market distortions" in our "I" component occur. Coupled with the relentless QEs, LTROs, HuWen-nomics and Abenomics, understandably, some of these "free instant money" had "flocked" into our properties sector and "roosting" there for now. As reported, bulk of the 77% household debts as a proportion of our GDP is tied up in our number 1 local favourite "Golden Geese". No prize for correct guessing of what our #1 "Golden Geese" are.
Such downside risks caused by external factors beyond our control possibly can be mitigated by government policies which are seen in the 7 rounds of cooling measures in the property market sector since 2009.
Nonetheless, right now the market direction is almost solely pivoted on FED chairman Ben Bernanke "Shakespeare's Hamlet's To Be or Not To Be tapering off script". "Daftly", all the smartest brains in the global financial markets would be "clinging" to every word and body language the 21st century Hamlet's main cast might be saying or "displaying" in the US Congressional committees' testimonies and hearings over the next two days.
Even if PAP and shylock wants to pile debt on us, today the good collaterals is gone.
We are sinking in debts. Upon a financial crisis whereby 20% of Singaporeans got out of jobs, I see foreclosure, bad debt.
This will bankrupt the banks.
While forceclosure will put people out on streets, making us a cesspool of crimes. The rich will flee like nobody.
We just need an economics jolt.
Moody's downgrading our 3 local banks.
Hasn't Moody's been downgraded recently?
Isn't it a bit like Singapore awarding the World City Prize to New York (and Michael Bloomberg)?
Or maybe;
Hitler awarding the Human Rights award to Nelson Mandela?
http://www.leekuanyewworldcityprize.com.sg/press5.htm
The whole financial system is in a mess, orchestrated by a bunch of crooks and criminals. And the authority could not do anything about it as they are also in it or at least their hands are also in the money. Oops, I must clarify this part, I mean the world's financial system with its HQ in New York.
And the rating agencies are part of it as seen in the subprime crisis.
Many people are ignorant of what back our banks up. The strength of our bank is honest and hardworking Singaporeans willing to enslave themselves 30 years, to procreate another generation of slaves.
These are the patriotic singaporeans that PAP merilessly dump and deride once they got fired, sicked, or need medical care.
Instead of helping these patriotic Singaporeans, PAP uses their misfortune to pile them up with health care burden and import FT to screw their wage.
How much debt can PAP pile on us. I think its not much. The people are already dry.
The household debt is so immense that the risk is too big.
Today PAP still brag that there is net positive household wealth because of asset inflation. When the bubble burst, your whole life saving got wipe out and the most hardworking singaporeans will have a big net debt that they will never be able to service.
Their whole life will be destroyed.
And I no longer see EDB being able to create jobs like the way before, that is profitble for banks to milk us.
Hi For Sustainable Sg, welcome to the blog.
All financial bubbles will burst. It is a cyclical thing and once someone screams get out there will be a stampede to see who can get out faster. With the kind of prices today, not many are going to find buyers for their super inflated properties.
The music is going to stop and many will be caught standing.
The Gold bubble just went popped.
The people are already dry.
Veritas July 17, 2013 11:53 am
Not really lah. At least 43% of voters are still very "wet" and liquid with lots of cash (or is it credit?) to spend in high cost Sinkieland.
Dry voters where got vote PAP one, especially in a by election, tio bo?
The music is going to stop and many will be caught standing.
RB July 17, 2013 12:02 pm
Of course if depend on Sinkie pool only, the music would have stopped long ago already.
But you must know that the outside world and oceans is very big and wide. There are so many fishes, big and small and of all types out there, tio bo?
That's where PAP can get the supply. So how can the music stop, you tell me lah?
And as long as WP remains the strongest oppostion, PAP will achieve its 6.9 million population target, you know. In fact any target PAP wants.
What to watch out for ..........
People still flood property launches!
People still buy bigger cars!
What crisis ?????
The music has been so good, Sinkies are asking for encore.
And because the Musicians are very well appreciated and rewarded, they are very obliging. They will entertain You into the wee hours. All the people need to do is that You can afford to find the transport home for a good long sleep. That is; You can afford the time.
What Moody didn't know is that SinCity is different from other first world country in solving these crisis as they have a very important secret weapon most countries do not have the privilege of using , which is creative accounting which take advantages of lack of transparency, accountability and responsibility. Just change some figures, problem solved, ministers's salary will then increased and they praised themselves. PAP is the best .
Redbean,
please don't underestimate the world's most expensive clowns. Moody must be having bad moody due to great aunt coming.
'Look at the latest property launch, oversubscribed!'
- when people have this kind of thinking, the crisis is very near. this was the exact sentiment before 2008 in the west.
- sinky economy is mostly fueled by property debts which during interest rates hiking and withdrawing of international funds, is unsubstainable. it will be a mad rush to exit the market for everyone.
PRs and foreigners that bought those highly priced property can easily disappeared into their third world countries without fulfilling their loan obligation. The banks will be the ones writing off those depreciated assets. Citizens will suffer big time.
Would be house buyers will save if property price slides by 30%.
Much better if it is down by 50%, 30% follow by 20% .
Best will be another 10% after the 20%.
We have enough rich people around....
Property Prices will stay high, no correction.....
People will still buy those expensive cars...
Just look around us, everyone is smiling and happy........
Look at usa and europe, they also have many ultra rich people but they also cannot avoid a crisis.
Anon 3:56pm
U may be right!
>>3:21 pm
Guess the locals will have to foot the bill of bailing those banks out just like in the west.
and there will be many cases of Ma Chi....btw, what happened to the case?
All said....
Property still climbs new high.........
COEs/car prices at near record high.......
Many others.....
So...........
We give you best Escorts in Malaysia +60189720057 Best ever Escorts in Malaysia, Malaysia Escorts, Pakistani And Indian Escorts in Malaysia
http://babesformalaysia.com/
Their companionship is absolutely stuffed up with lots of a laugh in order that their customers can take the benefits of their services wishfully. Indian Escorts in Malaysia, you can see diversify splendor and appeal and out of these available models there are some Asian women, European escorts and Indian escorts who serve their clients in better way. Indian Escorts in Malaysia The romantic contact of a female with fantastic splendor is type of in your feet and if you wants to revel in the one hundred% actual fit of your sexual myth then Malaysian escorts is the appropriate solutions https://escortsinkualalumpur.com/
Post a Comment